Dear Attorney,

Is it just me or is the Temecula Valley in pretty bad shape? It seems like everyone I know is in foreclosure or bankruptcy or both.

Do you know the statistics on that? What happened?

Colin, Winchester

Dear Colin,

Riverside County ranks way up there in there as a hotbed of foreclosure activity compared to the rest of the nation and that’s because so much of the housing in this area is new.

There were a lot of those 100 percent financed adjustable rate securitized loans based on stated income in the past eight years or so.

And all those lousy loans that people couldn’t afford in the first place recast at an interest rate so high that a lot of people saw their house payment double. Double.

When that happened, a lot of folks scrambled to refinance, but they encountered two problems along the way:

1. Their houses had no equity; in fact, they were "upside down"

2. Banks weren’t lending money. They were in trouble themselves because they had invested so much in those mortgage-backed securities.

So much for affordable housing.

Most folks used their credit cards to get by and ended up too deep in debt to ever hope to repay what they owed. Foreclosures skyrocketed. Bankruptcy filings soared.

Ironically, credit card companies that lobbied so fiercely for the new bankruptcy law that was passed in 2005 and was supposed to curb Chapter 7 filings are suddenly being discharged in bankruptcy at record numbers.

Locally, bankruptcy filings are at an all-time high. The Bankruptcy Court in the Central District of California handles more filings than any other district in the nation.

Before you pack up and move, you should know that the Central District also covers more territory than any other Bankruptcy Court, extending as far north as San Luis Obispo County, encompassing that county and Riverside, Los Angeles, San Bernardino, Orange, Ventura and Santa Barbara counties as well.

The district covers 40,000 square miles of California.

In March alone, 2,009 Chapter 7 bankruptcies were filed in the Central District, up about 101.2 percent from March of last year.

But more cases were filed in Los Angeles County, where 2,269 new petitions were filed last month, an increase of 97.2 percent.

The per-capita incidence of Chapter 7 filings in Nevada, Indiana, Georgia, Alabama, Michigan and Tennessee is much higher than here in Southwest Riverside, though, and that’s encouraging (unless you live in Nevada, Indiana, Georgia, Alabama, Michigan or Tennessee).

As far as foreclosures are concerned, brace yourself, Temecula and surrounding areas.

I think we’re going to see a new wave of foreclosures hit the area soon when more recent loans start to recast and the effects of rising unemployment in the area cause more and more folks in this area to default on their loans.

Dear Attorney,

I just got off the phone with a collection agency trying to collect for one of my credit cards. They told me they are going to garnish my wages.

Can they do that? Is there any way to stop it?

Desiree, Temecula

Dear Desiree,

If they have sued you and obtained a Judgment from the court, they can attach your wages (unless your wages are exempt).

Assuming the creditor knows where you live and/or work, you would have to be served personally with the Complaint and given 30 days to file an Answer if you were sued, so you would know.

If you don’t file an Answer to the Complaint, they can get a default judgment and then garnish your wages. Your employer will notify you if and when they are served with a garnishment.

You can stop the garnishment by paying off the debt, filing bankruptcy or filing a claim of exemption in the state court if your wages are actually exempt from collection.

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